Samsung and Tesla Sign Semiconductor Manufacturing Deal

South Korean company Samsung Electronics has signed a contract with Tesla worth $16.5 billion for the production of semiconductors for artificial intelligence.

This was reported by Bloomberg.

The largest company in South Korea announced on Monday that it has secured a chip manufacturing agreement totaling 22.8 trillion won, which will remain effective until the end of 2033. Tesla's CEO Elon Musk confirmed the Bloomberg report, stating that the upcoming factory in Taylor, Texas, will produce next-generation AI6 chips for Tesla.

Musk clarified that he will personally oversee the production line and has received authorization from Samsung to assist in optimizing the manufacturing process.

The signing of the contract comes at a time when Samsung is gradually losing ground in chip manufacturing. The company faces challenges in securing enough orders to fully utilize its production capacity. It has postponed the completion and opening of its new Texas facility until 2026.

This contrasts with leading chip manufacturer Taiwan Semiconductor Manufacturing Co., which still cannot meet the entire demand. According to TrendForce from Taipei, in the first quarter of this year, TSMC held a dominant market share of 67.6% in global foundry production, while Samsung's share decreased to 7.7% from 8.1% in the previous quarter.